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BVT - The Bidvest Group Limited - Results for the half year ended December 31

Release Date: 28/02/2011 07:30
Code(s): BVT
Wrap Text

BVT - The Bidvest Group Limited - Results for the half year ended December 31 2010 The Bidvest Group Limited Incorporated in the Republic of South Africa ("Bidvest" or "the Group" or "the Company") Registration number 1946/021180/06 Share code: BVT ISIN: ZAE000117321 Results for the half year ended December 31'2010 Revenue R58,5 billion +4,2% Trading profit R2,8 billion +8,0% Headline earnings R1,7 billion +11,3% Headline earnings per share 539,8 cents +9,1% Cash generated by operations R3,6 billion +4,8% Distribution per share 225,0 cents +8,7% Consolidated income statement for the Half year ended Year ended December 31 June 30 2010 2009 % 2010
R`000 Unaudited Unaudited change Audited Revenue 58 492 467 56 113 097 4,2 109 789 207 Cost of revenue (46 774 301) (44 610 (86 778 298) 366)
Gross income 11 718 166 11 502 799 23 010 841 Other income 286 460 180 418 424 725 Operating expenses (9 179 991) (9 066 804) (17 880 870)
'Sales and (5 990 427) (6 182 358) (12 115 distribution costs 597) 'Administration (2 129 438) (2 043 773) (4 069 739) expenses 'Other costs (1 060 126) (840 673) (1 695 534) Trading profit 2 824 635 2 616 413 8,0 5 554 696 'Acquisition costs - (53 416) (61 202) 'Net capital items 11 053 (10 450) (30 151) Operating profit 2 835 688 2 552 547 11,1 5 463 343 Net finance charges (308 475) (385 599) (758 479) 'Finance income 26 195 36 323 64 408 'Finance charges (334 670) (421 922) (822 887) Share of profit of 45 661 26 383 40 983 associates 'Dividends received 19 811 16 697 30 785 'Share of current 25 850 9 686 10 198 year earnings Profit before 2 572 874 2 193 331 17,3 4 745 847 taxation Taxation (741 126) (597 135) (1 301 059) 'Normal (671 776) (596 119) (1 298 744) 'Secondary tax on (69 350) (1 016) (2 315) companies Profit for the 1 831 148 1 596 196 14,7 3 444 788 period Attributable to: 'Shareholders of 1 729 630 1 543 407 11,8 3 345 175 the Company 'Minority 101 518 52 789 99 613 shareholders 1 831 148 1 596 196 14,7 3 444 788 Shares in issue 'Total 320 306 317 196 319 006 'Weighted (`000) 319 279 312 213 314 510 'Diluted weighted 320 419 314 675 316 439 (`000) Basic earnings per 541.7 494.3 9,6 1 063.6 share (cents) Diluted earnings 539.8 490.5 10,1 1 057.1 per share (cents) Headline earnings 539.8 495.0 9,1 1 070.0 per share (cents) Diluted headline 537.9 491.1 9,5 1 063.4 earnings per share (cents) Distributions per 225,0 207.0 8,7 432.0 share (cents)* *Includes distribution from share premium and capitalisation issue HEADLINE EARNINGS The following adjustments to profit attributable to shareholders were taken into account in the calculation of headline earnings: Profit attributable 1 729 630 1 543 407 11,8 3 345 175 to shareholders of the Company Impairment of: 'Property, plant 922 9 304 30 271 and equipment 'Goodwill 2 855 - 5 528 'Intangible assets - 310 6 158 Net loss (profit) on disposal of: 'Property, plant (13 091) 21 100 8 814 and equipment 'Intangible assets - - 1 711 Net loss on disposal of interests in subsidiaries and disposal and closure of - 5 636 - businesses Reversal of - (25 900) (25 900) impairment of investments in associate Net loss (profit) (1 739) - 3 569 on change in shareholding in associates Tax charge (relief) 2 491 (8 513) (4 892) Minority 2 396 - (5 312) shareholders 1 723 464 1 545 344 11,3 3 365 122 Consolidated statement of other comprehensive income for the Half year ended Year ended December 31 June 30
2010 2009 2010 R`000 Unaudited Unaudited Audited Profit for the period 1 831 148 1 596 196 3 444 788 Other comprehensive income (expense) 'Decrease in foreign currency (401 221) (371 375) (675 601) translation reserve Increase (decrease) in fair (795) 2 119 (12 831) value of available-for-sale financial assets Increase (decrease) in fair (1 104) 2 943 (17 877) value of available-for-sale financial assets before tax ''Taxation 309 (824) 5 046 Total comprehensive income for 1 429 132 1 226 940 2 756 356 the period Attributable to 'Shareholders of the Company 1 332 766 1 180 394 2 661 125 'Minority shareholders 96 366 46 546 95 231 1 429 132 1 226 940 2 756 356
Segmental analysis for the Half year ended Year ended December 31 June 30
2010 2009 % 2010 R`000 Unaudited Unaudited change Audited REVENUE 'Bidvest Automotive 9 568 034 8 130 100 17,7 16 688 407 'Bidvest Foodservice 29 210 444 30 361 970 (3,8) 58 389 859 ''Europe 17 030 599 18 860 467 (9,7) 35 460 797 ''Asia Pacific 9 563 932 8 912 682 7,3 17 547 642 ''Southern Africa 2 615 913 2 588 821 1,0 5 381 420 'Bidvest Freight 9 591 776 8 005 679 19,8 15 941 865 Bidvest Industrial 4 367 565 4 334 998 0,8 8 643 601 and Commercial 'Bidvest Namibia 923 017 949 384 (2,8) 1 949 205 'Bidvest Paperplus 1 255 797 1 131 108 11,0 2 091 926 'Bidvest Services 4 504 477 4 098 706 9,9 8 536 853 'Bidvest Corporate 216 242 223 268 (3,1) 444 034 59 637 352 57 235 213 4,2 112 685 750
Inter Group (1 144 (1 122 (2 896 543) eliminations 885) 116) 58 492 467 56 113 097 4,2 109 789 207 TRADING PROFIT 'Bidvest Automotive 243 655 152 635 59,6 359 532 'Bidvest Foodservice 956 244 1 032 377 (7,4) 2 046 017 ''Europe 370 440 447 320 (17,2) 897 771 ''Asia Pacific 400 361 370 915 7,9 729 375 ''Southern Africa 185 443 214 142 (13,4) 418 871 'Bidvest Freight 399 360 376 519 6,1 794 284 ' Bidvest Industrial 151 024 171 414 (11,9) 421 286 and Commercial 'Bidvest Namibia 220 603 150 022 47,0 367 891 'Bidvest Paperplus 154 236 136 583 12,9 248 311 'Bidvest Services 648 271 515 686 25,7 1 190 578 'Bidvest Corporate 67 996 90 153 (24,6) 205 851 2 841 389 2 625 389 8,2 5 633 750 'Share-based payment (16 754) (8 976) (79 054) expense 2 824 635 2 616 413 8,0 5 554 696 Consolidated condensed statement of cash flows for the Half year ended Year ended December 31 June 30
2010 2009 2010 R`000 Unaudited Unaudited Audited Cash flows from operating 774 839 1 627 867 4 856 127 activities 'Operating profit 2 855 499 2 569 244 5 532 999 (including dividends from associates) 'Depreciation and 916 173 941 028 1 870 465 amortisation 'Other non-cash items (150 456) (54 998) (104 214) 'Cash generated by 3 621 216 3 455 274 7 299 250 operations before changes in working capital 'Changes in working capital (1 006 005) (431 553) 684 970 'Cash generated by 2 615 211 3 023 721 7 984 220 operations 'Net finance charges paid (306 532) (379 615) (659 634) 'Taxation paid (751 060) (405 681) (1 166 914) 'Distributions by- Company (725 113) (598 337) (1 267 899) '- subsidiaries (57 667) (12 221) (33 646) Cash effects of investment (1 660 868) (3 344 728) (4 846 526) activities 'Net additions to vehicle (33 142) (250 982) (382 822) rental fleet 'Net additions to property, (1 312 553) (1 378 628) (2 332 242) plant and equipment 'Net additions to (122 014) (49 764) (140 118) intangible assets 'Net acquisition of (193 159) (1 665 354) (1 991 344) subsidiaries, businesses, associates and investments Cash effects of financing 412 066 2 134 237 993 372 activities 'Proceeds from shares - 1 084 013 1 233 119 issued- Company - subsidiaries - 305 480 300 772 'Net issue (purchase) of 87 544 (6 173) 23 714 treasury shares 'Net borrowings raised 213 370 951 998 175 385 'Net increase (decrease) in 111 152 (201 081) (739 618) bank overdrafts Net increase (decrease) in (473 963) 417 376 1 002 973 cash and cash equivalents Net cash and cash 4 138 722 3 212 425 3 212 425 equivalents at beginning of the period Exchange rate adjustment (112 953) (165 026) (76 676) Net cash and cash 3 551 806 3 464 775 4 138 722 equivalents at end of the period Consolidated statement of financial position as at December 31 June 30 2010 2009 2010 R`000 Unaudited Unaudited Audited ASSETS Non-current assets 19 735 948 19 367 912 19 371 091 'Property, plant and equipment 10 770 264 10 465 714 10 367 571 'Intangible assets 659 488 656 493 651 094 'Goodwill 5 524 899 5 673 794 5 709 169 'Deferred tax asset 447 918 309 094 426 822 'Defined benefit pension 129 850 115 392 129 850 surplus 'Interest in associates 652 530 579 242 656 865 'Investments 1 408 885 1 069 888 1 157 190 'Banking and other advances 142 114 498 295 272 530 Current assets 23 812 631 23 044 858 23 973 829 'Vehicle rental fleet 876 186 858 987 915 042 'Inventories 8 446 739 7 860 914 8 030 752 'Short-term portion of banking 202 310 227 384 350 086 and other advances 'Trade and other receivables 10 735 590 10 632 798 10 539 227 'Cash and cash equivalents 3 551 806 3 464 775 4 138 722 Total assets 43 548 579 42 412 770 43 344 920 EQUITY AND LIABILITIES Capital and reserves 18 150 811 16 356 030 17 392 937 'Attributable to shareholders 17 447 298 15 733 685 16 736 503 of the Company 'Minority shareholders 703 513 622 345 656 434 Non-current liabilities 4 604 980 5 712 260 4 669 207 'Deferred tax liability 411 324 220 665 378 992 'Life assurance fund 40 469 16 916 13 734 'Long-term portion of 3 357 587 4 609 758 3 448 501 borrowings 'Post-retirement obligations 367 324 439 581 394 527 'Long-term portion of 216 685 211 145 235 253 provisions 'Long-term portion of 211 591 214 195 198 200 operating lease liabilities Current liabilities 20 792 788 20 344 480 21 282 776 'Trade and other payables 14 219 051 14 049 947 15 032 357 'Short-term portion of 298 193 286 461 251 635 provisions 'Vendors for acquisition 539 - 539 'Taxation 334 351 449 310 364 558 'Short-term portion of banking 1 122 957 848 548 1 080 366 liabilities 'Short-term portion of 4 817 697 4 710 214 4 553 321 borrowings Total equity and liabilities 43 548 579 42 412 770 43 344 920 Number of shares in issue 320 306 317 196 319 006 Net tangible asset value per 3 516 2 965 3 253 share (cents) Net asset value per share 5 447 4 960 5 246 (cents) Consolidated statement of changes in equity for the Half year ended Year ended December 31 June 30
2010 2009 2010 R`000 Unaudited Unaudited Audited Equity attributable to shareholders of the company Share capital 16 367 17 423 17 507 'Balance at 17 507 16 814 16 814 beginning of the period 'Shares issued - 609 693 during the period 'Cancellation (1 140) - - of treasury shares Share premium 81 258 703 546 81 258 'Balance at 81 258 228 301 228 301 beginning of the period 'Shares issued - 1 137 071 1 236 462 during the period 'Refund of - (657 884) (1 379 469) share premium to shareholders 'Share issue - (3 942) (4 036) costs Foreign (375 542) 326 614 20 527 currency translation reserve 'Balance at 20 527 691 746 691 746 beginning of the period 'Total (396 069) (365 132) (671 219) comprehensive income for the period Statutory 11 940 10 093 15 215 reserves 'Balance at 15 215 13 033 13 033 beginning of the period 'Transfer from (3 275) (2 940) 2 182 (to) retained earnings Equity-settled 345 390 262 838 328 640 share-based payment reserve 'Balance at 328 640 253 936 253 936 beginning of the period 'Arising during 16 750 8 902 74 704 the period Retained 18 039 668 16 840 927 18 619 202 earnings 'Balance at the 18 619 202 15 206 432 15 206 432 beginning of the period 'Total 1 728 835 1 545 526 3 332 344 comprehensive income for the period 'Dividends paid (725 113) - - 'Transfer of (1 152) 86 029 82 608 reserves as a result of changes in shareholding of subsidiaries 'Cancellation (1 585 379) - - of treasury shares 'Transfer from 3 275 2 940 (2 182) (to) statutory reserves Treasury shares (671 783) (2 427 756) (2 345 846) 'Balance at the (2 345 846) (2 481 130) (2 481 130) beginning of the period 'Purchase of - (6 173) (24 975) shares by subsidiaries 'Shares 87 544 - 48 689 disposed of in terms of share incentive scheme 'Refund of - 59 547 111 570 share premium received by subsidiaries 'Cancellation 1 586 519 - - of treasury shares 17 447 298 15 733 685 16 736 503 Equity attributable to minority shareholders of the Company 'Balance at 656 434 368 495 368 495 beginning of the period 'Total 96 366 46 546 95 231 comprehensive income for the period 'Dividends paid (57 667) (12 221) (33 646) 'Share-based 4 74 5 525 payment reserve 'Capital - 305 480 300 772 invested by minority shareholders 'Transactions 7 224 - 2 665 with minority shareholders 'Transfer of 1 152 (86 029) (82 608) reserves as a result of changes in shareholding of subsidiaries 703 513 622 345 656 434 Total equity 18 150 811 16 356 030 17 392 937 Comment Solid results were achieved for the half year ended December 31 in the face of a strong average South African exchange rate and weak economic activity in a number of geographic regions in which the Group operates. Headline earnings per share (HEPS) increased by 9,1% to 539,8 cents per share while basic earnings per share increased by 9,6% to 541,7 cents per share. The average rand exchange rate strengthened versus sterling and the euro with negative impact on the translation of the earnings of foreign operations equivalent to 2,3% of HEPS. Results were also impacted by a R67,0 million increase in the tax charge as a result of the Secondary Tax on Companies paid on the 2010 final dividend - a charge that had not been incurred in the comparative period. This negatively impacted HEPS by 4,4%. Deflation on food products was evident in a number of regions, with impact on trading margins. Operations continued to make gains as they traded aggressively in competitive markets. Trading conditions in southern Africa have shown some encouraging signs, particularly in certain sectors of the corporate market. However, discretionary consumer spending hasn`t fully recovered. Businesses exposed to South Africa`s infrastructure and construction sectors witnessed continued decline in activity levels. Bidvest Asia Pacific continues to deliver strong results. Overall, Bidvest Europe was weaker as a result of the prevailing economic climate and poor weather conditions. Operational management`s back-to-basics approach on asset and cash flow management fostered inventory optimisation while minimising debtor delinquencies. Generating adequate returns on funds employed across all regions remains a core philosophy. Bidvest continued to invest in infrastructure to ensure medium-term growth and sustainability. Black economic empowerment Bidvest has been awarded Level 3 BBBEE status, reflecting the efforts of management and staff to achieve transformation objectives. The promotion of black executives to senior management positions remains the greatest challenge and a key priority. The Group is extremely proud of the value created for Dinatla, our broad-based BEE partner. Strategic realignment of executive management responsibilities Bidvest faces a wide array of opportunities and challenges in its continuing pursuit of superior performance for all stakeholders. To increase the focus of responsibilities and create capacity for expansion, the following actions have been taken. Bernard Berson was appointed managing director of Bidvest Foodservice in 2010. As a further step, Lindsay Ralphs will now assume the role of managing director for all the core South African operations, excluding food. Brian Joffe continues in his role as Group chief executive along with David Cleasby as the Group finance director. Myron Berzack takes on the new position of Group strategic director. Accordingly, certain divisional management reporting lines in South Africa will change, as and when appropriate. Acquisition The Group acquired 100% of the share capital of Seafood Holdings Limited ("Seafood") for an enterprise value of GBP45,0 million, effective January 2011. Seafood affords a unique opportunity to acquire a market-leading fresh fish foodservice business in the United Kingdom with sufficient geographic reach to provide a solid platform for growth. Financial overview Revenue grew 4,2% to R58,5 billion (2009: R56,1 billion). Operating expenses remained a key focus area and were well controlled across the Group increasing by 1,3%. Overall trading margin improved slightly to 4,8% (2009: 4,7%) despite a relative increase in the revenue mix of lower margin operations such as forwarding and clearing and automotive retailing. Cash generated by operations before working capital changes improved 4,8% to R3,6 billion. Working capital absorption of R1,0 billion is a result of normal seasonal demands and increased requirements as the businesses return to growth. Our balance sheet remains robust and appropriately capitalised. Net debt increased to R4,6 billion (June 2010: R3,7 billion), driven principally by the increase in working capital. Interest cover improved from 6,8 times in 2009 to 9,2 times, reflecting adequate borrowing capacity. Net finance charges declined 20,0% to R308,5 million. Adequate exposure to the short end of the funding market in South Africa`s stable interest rate environment was also beneficial. Bidvest`s attitude to gearing remains conservative and appropriate in the current climate. In December, Fitch Ratings affirmed the Group national rating at A+ with a positive outlook. Moody`s continue to rate the Group at A1.za with a stable outlook. Divisional review Bidvest Freight Good trading levels lifted revenue to R9,6 billion (2009: R8,0 billion), though trading profit of R399,4 million (2009: R376,5 million) did not match revenue growth following an accounting charge required as a result of its lease extensions. Performance was bolstered by a turnaround at Safcor Panalpina and another excellent performance by the bulk terminals businesses. SABT had a good half-year, driven by volume gains, particularly maize exports. IVS did well though revenue was under pressure. Costs were well managed. BPO performed well on the back of a strong second quarter and volume improvements across the business, notably steel through the port of Durban. Continuing rail challenges leading to lower throughput and higher rentals negatively impacted Bulk Connections. SACD had an improved first half, with the new Cape Town facility showing higher utilisation. Safcor Panalpina increased revenue on the back of improved volumes and controlled expenses. Rennies Distribution Services performed much better as a result of higher volumes and expansion of the business. Naval benefited from an increase in sized coal handling. Manica disappointed, recording a small loss. Bidvest Services Good trading was experienced, with revenue up 9,9% to R4,5 billion (2009: R4,1 billion) while trading profit rose 25,7% to R648,3 million (2009: R515,7 million). Asset management and expense control remained efficient, improving overall returns. Budget Car and Van Rental (ex-Bidvest Automotive) was transferred into Bidvest Services following a management realignment. Volumes across Bidtravel improved and overall results were good, despite significant restructuring costs. Prestige again returned excellent results as 2010 FIFA World CupTrade Mark benefits came through. TMS faced continuing challenges. Steiner maintained its run of good results with returns at record levels. Cost control remains a priority. The business benefited from the strong rand. Laundry operations felt the impact of low hotel occupancies and rising utility costs. In spite of this, a satisfactory result was returned. Industrial Products performed strongly. Giant Clothing in Swaziland did well, driving up production volumes and quality standards. Konica Minolta SA revenue showed a pleasing recovery, but a strong yen kept pressure on margins. Oce benefited from rand strength versus the euro and produced excellent results. Magnum returned strong results as guarding activities prospered. Magnum Technology (formerly Provicom) was restructured and fully integrated into Magnum. Global Payment Technologies was bolstered by good product sales. Service revenue was also up. Bidair showed continued improvement as the ramp division drew benefit from its restructure. Express Air Services did especially well. Low volumes in the hotel, landscaping and sports sectors impacted Greens division, though Pureau and Execuflora performed strongly. Bidvest Bank performed well in a difficult market. Significant growth in revenue was achieved through diversification of its asset base. Bidprocure made continued progress with the Buy Bidvest project. The Budget Car and Van Rental business model is under review to enable improved returns. Bidvest Foodservice Revenues of R29,2 billion (2009: R30,4 billion) reflect continuing pressure on consumers in both the out-of-home eating and institutional sectors and the impact of the translation of the earnings of foreign businesses into rands. Margin squeeze and downtrading impacted trading profit, which eased lower to R956,2 million (2009: R1'032,4 million). Trading challenges were particularly acute in Europe. Pressure also mounted in southern Africa. Asia Pacific showed continuing resilience, with pleasing performance in the core Australian and New Zealand markets and further gains in Asia. Asia Pacific Asia Pacific returned generally pleasing results. The Australian business put in a good performance in the face of challenging conditions, most notably deflation in Australia. Bidvest Australia continues to gain market share and revenue benefited from both acquisitive and organic growth. The Logistics (QSR) team did particularly well. A Sydney facility was acquired for A$10,0 million to house both Logistics and Foodservice. Continued growth of the Australian business is projected, though challenges continue. Bidvest New Zealand recorded satisfactory results, despite disappointing levels of consumer spending in December. Earthquakes in the South Island were another negative factor. Even so, forward momentum was maintained following gains of new National Account business and growth of the Prime Vendor customer-base. Foodservice showed continued improvement, Fresh saw good growth and Logistics did well. Singapore registered growth on prior year, with a particularly pleasing contribution from Foodservice. Hotel sector opportunities were optimised. The export team also did well. Greater China`s performance was buoyed by robust domestic demand and a strong performance by Hong Kong, which enjoyed a record second quarter. Good progress in mainland China prepares the way for extension of the base into provinces such as Xian, Cheungsa, Wuhan, Naming and Hainamdao. Europe Europe faced challenges in all national markets. Severe winter weather in December exacerbated trading difficulties. In the UK, a recovery at 3663 Wholesale stalled in December`s ice and snow. Costs and credit extension were well controlled. ROFE showed pleasing improvement. Bidvest Logistics achieved some sales growth, but cost pressure severely impacted performance. Deli XL Netherlands returned flat results as local consumption showed no sign of recovery. Margin pressure increased in the institutional and catering segments. Deli XL Belgium was also impacted by tough economic conditions, with more to come as the country braces itself for an austerity budget. Horeca Trade in the UAE achieved growth on the prior year while Al Diyafa, the start-up JV in Saudi Arabia, made a pleasing profit. Nowako in Czech Republic and Slovakia was impacted by pressure on sales and margins as unemployment rose and people`s pay fell. Market-share gains in the hotel, restaurant and catering segment offset some of the effects of lower household spending in the retail sector. Overheads were well controlled. Farutex Poland returned pleasing results as sovereign financial reform has been delayed and the national economy continues to perform relatively well. Southern Africa Foodservice SA faced market contraction following the 2010 FIFA World CupTrade Mark. Trading challenges were compounded by deflation across several categories, down-trading, price resistance by indebted consumers and continuing pressure on hotels, restaurants and industrial caterers. Foodservice SA was impacted by these macro conditions and the loss of a major national logistics account in October 2010. Efforts to secure replacement volumes were bearing fruit by year- end. Volumes in the industrial catering channel faced particular pressure. The leisure segment made a festive season revival, but business failures are a continuing concern. Market-share gains were achieved with national accounts and expenses were well controlled. Bidfood Ingredients achieved revenue growth in some areas of the business, but deflation across major product categories impacted overall trading results. Crown Foods and Chipkins Bakery Supplies managed a measure of growth and the Chipkins Bakery factory maintained its strong recovery. NCP performed below the comparative period due to higher input costs and competitive pricing pressure. Asset management was satisfactory and strong cash generation was maintained. Speciality put in a good performance in tough trading conditions. Pleasing revenue growth was achieved despite the loss of certain agencies. Bidvest Industrial and Commercial The business was impacted by a weak trading environment and the knock-on effects of a big decline in government tenders. Revenue of R4,4 billion (2009: R4,3 billion) was flat while trading profit fell 11,9% to R151,0 million (2009: R171,4 million). Low levels of construction activity were negative for Electrical Wholesale. Expense control was rigorous in the face of rising transport and personnel costs and ERP implementation. The copper price has firmed and stock levels have moved higher. Energy-related project delays impacted Voltex Solutions. Performance at Stationery and Furniture was disappointing though operating expenses were well managed. Cash flow improved. Revenue was flat at Waltons, but the brand enjoyed some success in protecting margins. Efforts to extract costs from certain regions have begun to bear fruit. Specialised Filing secured pleasing growth. Rand strength and reduced product incentives impacted Kolok. CN Business Furniture recorded another trading loss despite aggressive restructuring and expense management. Further remedial action is under way under the new managing director. Seating has exited over-traded sectors of the market in an effort to restore profitability. Dauphin performed well, boosted by increased project work. Volumes dipped at Afcom, but cash flow remained robust despite the effects of rand strength. Buffalo Executape did well, securing higher sales while increasing ROFE. Results at Vulcan Supplies were disappointing impacted by lower hospitality activity levels, the aftermath of the 2010 FIFA World CupTrade Mark. Materials Handling exceeded expectation. Bidvest Paperplus Though operational results were mixed, overall performance was pleasing, revenue rising 11,0% to R1,3 billion (2009: R1,1 billion) while trading profit moved 12,9% higher to R154,2 million (2009: R136,6 million). Teams did well to optimise a sudden demand uptick late in the period. Acquisition of Sprint Packaging strengthened the labels and packaging business and proved results- enhancing. ROFE rose and cash generation improved. General print demand remained low. A strong rand helped contain input costs, but constrained export activities. Lithotech Labels and Rotolabel performed relatively well in tough trading conditions. Wholesale Stationery Distribution had a good back-to-school season. The PWS business was rationalised. Its Johannesburg and Durban warehouses were closed. Personalisation and Mail continued its good run while shifting to a full-colour offering. Contract retention is good and Lithotech Afric Mail again won the SARS tender. Print Sales and Distribution recovered in the second quarter following a disappointing start to the year. Electronic billing continues to grow and Alternative Products put in another good showing. Bidvest Automotive Much improved trading conditions were experienced, with revenue up 17,7% to R9,6 billion (2009: R8,1 billion) while trading profit rose 59,6% to R243,7 million (2009: R152,6 million). Budget Car and Van Rental was transferred to Bidvest Services following a management realignment. McCarthy Motor group maintained its robust recovery, deriving continued benefit from recent restructuring. Revenue was above expectation and trading profit showed strong growth. Performance was driven by a significant improvement in new vehicle sales. The new car market has rebounded strongly - showing 30% industry growth in 2010 - while finance approvals from the banks have continued their slow improvement. The trading environment remained extremely competitive, however. Challenges relate to an increasingly sluggish used-vehicle market and a decline in after-sales volumes, a reflection of the shrinking vehicle population and on- going pressure on disposable income. The used-vehicle contribution was adversely affected by the bulk release of vehicles from Budget Car and Van Rental, following the 2010 FIFA World CupTrade Mark. Most franchises recorded encouraging results. Previous loss-making operations, namely Peugeot/Citroen and Inyanga Motors were turned around. Pleasing contributions came from VW/Audi and Mercedes Benz. Burchmore`s performance was disappointing, reflecting low levels of floor and auction activity. Bank repossessions were at an all-time low. Five under-performing Call-a-Car dealerships and one Value Centre dealership were closed. Working capital management remains a priority. Inventory levels and debtor balances came down while ROFE improved. Management continues its focus on dealerships that under-perform. Bidvest Financial Services performed well. Policy sales were robust and penetration levels high - the result of focused marketing. McCarthy Finance, our JV with Wesbank, saw a welcome return to profit. The development of new distribution channels in line with the revised business strategy is going well. Marketing on Google has begun. Investment income from the JSE exceeded expectations. Yamaha Distributors continued to experience volume pressure as the higher degree of consumer confidence failed to translate into an improvement in the leisure market in the lead up to the calendar year end. Margins, however, showed some improvement and debtors remain well controlled. Stock levels reduced by R22 milllion during the six month period, and by R44,7 million year-on-year. In mid- December, occupation began of Gauteng`s World of Yamaha facility. Bidvest Namibia A pleasing performance was recorded with trading profit of R220,6 million (2009: R150,0 million) 47,0% higher. Results were underpinned by a strong BidFish performance. Strong demand for horse mackerel, high catch rates and the recovery of Namibian marine resources more than compensated for the effects of local currency strength, lower than expected canned pilchard sales and under- performance in Angola. Profit on the sale of MFV Mars further strengthened results. BidCom had a disappointing first half, impacted by lower activity levels in key sectors, an absence of oil rig repair work and contract losses. Corporate Bidvest Properties took advantage of market conditions to realise profits on the disposal of two buildings while purchasing land in Durban earmarked for Waltons. Ontime Automotive in the UK faced challenging conditions, though Prestige vehicle distribution put in a pleasing performance, winning contracts from McLaren and Lamborghini. Further investment was made into Mumbai International Airport Limited, which continues to benefit from growing passenger volumes. Directorate Mr SG Pretorius will retire from the board with effect from March 1'2011. The board expresses its gratitude to Mr Pretorius for his contribution to the Group. Prospects Economic conditions in most of the geographies in which Bidvest operates have improved, resulting in higher activity levels, however, the European landscape is likely to remain weak. The underlying threat of inflation and the potential for rising interest rates present both opportunity and risk for trading operations. Our businesses have adjusted to the new economic reality. Management is acutely aware that innovation and service hold the key to future success. Realignment of executive responsibilities caters for succession, renews enthusiasm and provides new opportunities for the Group to achieve the next quantum leap in growth. Bidvest remains committed to its entrepreneurial and decentralised business model as the platform for achieving sustained growth. Management are optimistic about future business opportunities, which should enable a step up in growth rates and higher returns. Our balance sheet is well capitalised with ample capacity to fund expansion activities. We retain our appetite and desire for further strategic acquisition opportunities. Working capital management remains a focus area as a means to delivering acceptablereturns from funds employed. Going forward, we remain confident of an improving trading environment. For and on behalf of the board MC Ramaphosa B Joffe Chairman Chief executive Dividend Notice is hereby given that an interim cash dividend of 225,0 (2009: a distribution out of share premium: 207,0) cents per share, has been awarded to members recorded in the register of the Company at the close of business on Friday, April 1'2011. The salient dates applicable to the cash distribution are as follows: Last day to trade cum distribution Friday, March 25'2011 First day to trade ex distribution Monday, March 28'2011 Record date Friday, April 1'2011 Payment date Monday, April 4'2011 Share certificates may not be rematerialised or dematerialised during the period Monday, March 28'2011 to Friday, April 1'2011, both days inclusive. Shareholders are advised the payment of the interim cash dividend will attract seconday tax on companies at a rate of 10%. For and on behalf of the board CA Brighten Company secretary Johannesburg February 28'2011 Exchange rates The following exchange rates were used in the conversion of foreign interests and foreign transactions during the periods: December 31 June 30 2010 2009 2010 Rand/Sterling Closing rate 10,28 11,81 11,53 Average rate 11,18 12,57 12,05 Rand/euro Closing rate 8,81 10,62 9,34 Average rate 9,45 11,15 10,60 Rand/Australian dollar Closing rate 6,76 6,62 6,56 Average rate 6,74 6,67 6,71 Basis of presentation of financial statements These condensed financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS"), the interpretations adopted by the International Accounting Standards Board, South African interpretations of Generally Accepted Accounting Practice and include disclosure as required by IAS 34: Interim Financial Reporting. The financial statements have been prepared using accounting policies that comply with IFRS and which are consistent with those applied in the preparation of the financial statements for the year ended June 30'2010. The Group has, however, adopted the following new and modified standards and interpretations, in response to changes to IFRS: IAS 39 (revised) - Financial instruments: recognition and measurement, IAS 24 (revised) - Related party disclosure, IAS 32 (revised) - Financial instruments: presentation, IFRIC 14 - The limit on a defined benefit asset, minimum funding requirements and their interaction, and IFRIC 19 - Extinguishing financial liabilities with equity instruments. The adoption of the new and modified standards and interpretations has had no impact on the Group`s results. During the period the Budget Car and Van Rental business, previously included with Bidvest Automotive, has been reallocated to Bidvest Services segment. The comparative period`s results have been restated to reflect this change. Directors Chairman: MC Ramaphosa Independent non-executive: DDB Band, LG Boyle*, MBN Dube, S Koseff, NP Mageza, D Masson, JL Pamensky, NG Payne, Adv FDP Tlakula Non-executive: FJ Barnes*, AA Da Costa (alternate LJ Mokoena), RM Kunene, T Slabbert Executive: B Joffe (Chief executive), BL Berson**, MC Berzack, DE Cleasby, AW Dawe, LI Jacobs, P Nyman, SG Pretorius, LP Ralphs, AC Salomon (*British'**Australian) Company secretary CA Brighten Transfer secretaries Link Market Services South Africa (Pty) Limited 11 Diagonal Street, Johannesburg 2001, South Africa Registered office Bidvest House, 18 Crescent Drive, Melrose Arch, Melrose Johannesburg 2196, South Africa PO Box 87274, Houghton, Johannesburg 2041, South Africa Further information regarding our Group can be found on the Bidvest website www.bidvest.com Date: 28/02/2011 07:30:00 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. 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